Biocon Limited, Bangalore V. JCIT, Bangalore

ITA 530/BANG/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 7697 (ITAT-BANGALORE)
• Duration Of Justice: 2 year(s) 3 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-07-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 23-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P C KHINCHA
• Keywords: Question of law
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BANGALORE BENCH B BEFORE SHRI N.V VASUDEVAN , JUDICIAL MEMBER SHRI JASON P BOAZ, ACCOUNTANT MEMBER IT(TP)A NO.530/BANG /2016 (ASST. YEAR 200 8-09) M/S BIOCON LTD., 20 TH KM, HOSUR ROAD, ELECTRONICS CITY, BANGALORE. . APPELLANT VS. THE JT. COMMISSIONER OF INCOME-TAX L.T.U , BANGALORE. . RESPONDENT APPELLANT BY : SHRI P.C K HINCHA, C.A RESPONDENT BY : MS. NEERA M ALHOTRA, CIT DATE OF HEARING : 28-6-2018 DATE OF PRONOUNCEMENT : 18-7-2018 O R D E R PER SHRI JASON P BOAZ, ACCOUNTANT MEMBER : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE CIT(A) -14, LTU BANGALORE DATED 28/1/2016 LEVYI NG PENALTY OF RS.5,06,33,119/- U/S 271(1) (C) OF THE INCOME TA X ACT, 1961 (IN SHORT THE ACT) FOR ASST. YEAR 2008-09. 2. IN THIS REGARD, THE ASSESSEE HAS RAISED THE FOLL OWING GROUNDS ITS APPEAL:- IT(TP)A NO.530/B/16 2 1) THE LEARNED CIT(A) HAS ERRED IN LAW AND IN FACT IN PASSING AN ORDER UNDER SECTION 271(1) (C) OF THE ACT WHICH IS BAD IN LAW AND IN FACT AND IS VOID AB INITIO. 2) THE LEARNED CIT(A) HAS ERRED IN LAW AND FACT IN LEVYING PENALTY IN RESPECT OF DISALLOWANCE MADE WITHOUT APPRECIATING THAT NO INACCURATE PARTICULARS OF INCOME OR INCORRECT FACTS IN RESPECTS THEREOF WE RE FURNISHED BY THE APPELLANT AND THE SAID ISSUE WAS DEBATABLE ON WHICH TWO VIEWS ARE POSSIBLE 3) THAT THE LEARNED CIT(A) ERRED ON FACTS AND IN LAW IN ALLEGING THAT THE APPELLANT HAD CONCEALED INCOME AND FURNISHED INACCURATE PARTICULARS BY DISREGARDING THE DETAILED SUBMISSION FILED BY THE APPELLANT DATED DECEMBER 20, 2013, AUGUST 26, 2013, OCTOBER 7, 2013, JUNE 30, 2015 4) THAT THE LEARNED CIT(A) ERRED ON FACTS AND IN LAW IN DISREGARDING THE FACT THAT NO EXPLANATION PROVIDED DURING THE COURSE OF ASSESSMENT/ APPELLATE PROCEEDINGS WAS FALSE OR INACCURATE 5) THAT THE LEARNED CIT(A) ERRED ON FACTS AND IN LAW IN NOT APPRECIATING THAT SINCE SUBSTANTIAL QUESTION OF LAW IN RESPECT OF THE DISALLOWANCE IS ALREADY PENDING BEFORE THE INCOME-TAX APPELLATE TRIBUNAL, PENALTY UNDER SECTION 271 (1)(C) OF THE A CT, WAS EVEN OTHERWISE, NOT SUSTAINABLE IT(TP)A NO.530/B/16 3 6) THAT THE CIT(A) ERRED ON FACTS AND IN LAW BY DISREGARDING THE CIRCULARS ISSUED BY THE CENTRAL BOARD OF DIRECT TAXES ('CDBT') [CIRCULAR NO 204 DATED JULY 24, 1976 AND CIRCULAR NO 469 DATED SEPTEMBER 23, 1986] WHICH CLEARLY BRING OUT THE FAC T THAT ONCE ALL THE EXPLANATIONS AND FACTS ARE PROVIDED, EXPLANATION 1 T SECTION 271 OF THE ACT WOULD NOT BE APPLICABLE AND MERE REJECTION OF AN EXPLANATION WILL NOT INVOKE EXPLANATION 1 TO SECTIO N 271 OF THE ACT. 3. BRIEFLY STATED, THE FACTS RELEVANT FOR DISPOSAL OF THIS APPEAL ARE AS UNDER:- 3.1 THE ASSESSEE IS AN INDIAN COMPANY ENGAGED IN TH E BUSINESS OF MANUFACTURE OF BIO-TECHNOLOGICAL PRODUCTS IN THE PHARMACEUTICALS AND ENZYME SECTORS. FOR ASST YEAR 2008-09, THE ASSESSEE FILED ITS RETURN OF INCOME ON 30/9/2008 DE CLARING INCOME OF RS.336,54,93,391/-. THE CASE WAS TAKEN UP FOR SC RUTINY AND THE ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT VIDE ORDER DATED 31/12/2010 WHEREIN THE ASSESSMENT OFFICER (AO) H AD MADE CERTAIN ADDITIONS/DISALLOWANCES. ON APPEAL BY THE A SSESSEE, THE LD CIT(A), WHILE DISPOSING OFF THE APPEAL VIDE ORDER D ATED 23/7/2015, INTER ALIA, ALLOWED THE ASSESSEE PARTIAL RELIEF ON CERTAIN ISSUES. SHE, HOWEVER MADE AN ENHANCEMENT OF THE ASSESSEES INCOM E, ON THE TRANSFER OF TECHNOLOGY WITHOUT CONSIDERATION FROM T HE DTA UNIT TO IT(TP)A NO.530/B/16 4 THE TAX EXEMPT UNIT (EOU) AMOUNTING TO RS.14,93,236 /-; WHILE EXAMINING THE ASEEESSEES CLAIM FOR DEDUCTION U/S 1 0B OF THE ACT. PENALTY PROCEEDING, U/S 271(1)(C) OF THE ACT, FOR C ONCEALMENT OF INCOME WERE INITIATED VIDE NOTICE U/S 271 (1)(C) R. W.S 274 OF THE ACT DATED 23/7/2015. AFTER CONSIDERING THE ASSESSEE S REPLY, THE LD CIT(A) PROCEEDED TO LEVY PENALTY OF RS.5,06 ,33,119/- U/S 271(1)(C) OF THE ACT VIDE THE IMPUGNED ORDER DATED 28/1/2016 FOR ASST. YEAR 2008-09. 4.1 AT THE OUTSET OF THE HEARING, THE LD AR FOR THE ASSESSEE SUBMITTED THAT SINCE THE QUANTUM ADDITION/ENHANCEME NT OF INCOME OF RS.14,93,60,236/- MADE BY THE LD CIT(A) IN ORDER DATED 23/7/2015, ON THE BASIS OF WHICH THE PENALTY U/S 2 71(1)(C) OF THE ACT, HAS BEEN DELETED BY A COORDINATE BENCH OF THIS TRIBUNAL IN THE ASSESSEES OWN CASE VIDE ITS ORDER IN ITA NO. 1251 /BANG/2015 DATED 25/4/2018, THEREFORE THE PENALTY OF RS.5,06,3 3,119/- LEVIED U/S 271(1)(C) OF THE ACT IS TO BE DELETED. IN THIS REGARD OUR ATTENTION WAS DRAWN TO PARAS 8.3.1 TO 8.3.3 OF THE AFORESAID DECISION OF THE CO-ORDINATE BENCH IN THE ASSESSEES OWN CASE FOR AS ST. YEAR 2008-09 (SUPRA) TO DRIVE HOME THIS FACT. IN THIS REGARD, RE LIANCE WAS ALSO PLACED ON THE DECISIONS OF THE HONBBLE DELHI HIGH COURT IN THE CASE OF CIT VS. MOTILAL SHARMA (1955) 215 ITR 458 ( DELHI) AND OF THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS PRAKASH INDUSTRIES LTD (2010) 322 ITR 622 (PUNJAB & HARYANA) TO SUPPORT THE PROPOSITION THAT WHERE THE ADDITION ON THE BASIS OF IT(TP)A NO.530/B/16 5 WHICH PENALTY HAS BEEN LEVIED WAS DELETED, PENALTY WAS TO BE DELETED. THE LD. DR FOR REVENUE WAS ALSO HEARD. 4.2 WE HAVE HEARD BOTH PARTIES AND PERUSED AND CAR EFULLY CONSIDERED THE MATERIAL ON RECORD; INCLUDING THE JU DICIAL PRONOUNCEMENTS CITED. THE FACTS AS BORNE OUT FROM T HE RECORD REVEAL THAT WHILE DECIDING THE ASSESSEES APPEAL FO R ASST. YEAR 2008-09, THE LD CIT(A) DISPOSED OF THE ASSESSEES A PPEAL VIDE ORDER DATED 23/7/2015 MAKING AN ENHANCEMENT OF RS.14,93,60,236/- TO THE ASSESSEES INCOME AND INIT IATED PENALTY U/S 271(1)(C) OF THE ACT FOR CONCEALMENT OF INCOME BY I SSUE OF NOTICE U/S 274 R.W.S 271 OF THE ACT DATED 23/7/2015. SUBSE QUENTLY, AFTER CONSIDERING THE ASSESSEES REPLY IN THIS REGARD, TH E LD CIT(A) PROCEEDED TO LEVY PENALTY OF RS. 5,06,33,119/- B ASED ON THE AFORESAID ADDITION/ENHANCEMENT OF RS.14,93,60,236/ - VIDE THE IMPUGNED ORDER DATED 28/1/2016. WE FIND FROM THE DE TAILS SUBMITTED BEFORE US THAT A CO-ORDINATE BENCH OF TH IS TRIBUNAL IN THE CASE ON HAND VIDE ITS ORDER IN ITA NO. 1251/BANG/20 15 DATED 25/4/2018 HAS DELETED THE ADDITION/ENHANCEMENT OF RS.14,93,60,236/- WHICH WAS THE BASIS FOR LEVY OF P ENALTY U/S 271(1)(C) OF THE ACT FOR ASST. YEAR 2008-09. IN OUR VIEW, ONCE THE ADDITION ON THE BASIS OF WHICH THE PENALTY HAS BEEN LEVIED HAS BEEN DELETED, THEN THE PENALTY SO LEVIED IS ALSO BE DELE TED. IN COMING TO THIS VIEW, WE DREW SUPPORT FROM THE DECISION OF THE HONBLE DELHI HIGH COURT IN CIT VS MOTILAL SHARMA IN 215 ITR 458 (DEL) AND OF THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS PRAKASH INDUSTRIES LTD., (2010) 322 ITR 622 (P & H ). IN VIEW OF IT(TP)A NO.530/B/16 6 THE FACTS AND CIRCUMSTANCES OF THE CASE AS DISCUSSE D ABOVE, AND RESPECTFULLY FOLLOWING THE AFORESAID DECISIONS OF T HE HONBLE DELHI HIGH COURT (SUPRA) AND THE HONBLE PUNJAB & HARYAN A HIGH COURT (SUPRA), WE DELETE THE PENALTY OF RS. 5,06,33 ,119/- LEVIED U/S 271(1)(C) OF THE ACT FOR ASST. YEAR 2008-09. 5. IN THE LIGHT OF OUR ABOVE DECISION CANCELLING/DE LETING THE PENALTY LEVIED U/S 271(1)(C) OF THE ACT FOR ASST. Y EAR 2008-09, WE REFRAIN FROM ADJUDICATING THE GROUNDS OF APPEAL RAI SED BY ASSESSEE ON MERITS (SUPRA). 6. IN THE RESULT, THE ASSESSEES APPEAL FOR ASST. Y EAR 2008-09 IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 18 TH JULY, 2018 . SD/- SD/- (N.V VASUDEVAN) ( JASON P BOAZ) JUDICIAL MEMBER ACCOUNTANT MEMB ER BANGALORE DATED : 18/7/2018 VMS COPY TO :1. THE ASSESSEE 2. THE REVENUE 3.THE CIT CONCERNED. 4.THE CIT(A) CONCERNED. 5.DR 6.GF BY ORDER SR. PRIVATE SECRETARY, ITAT, BANGAL ORE. IT(TP)A NO.530/B/16 7 1. DATE OF DICTATION 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER . 3. DATE ON WHICH THE APPROVED DRAFT COMES TO SR. P.S... 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER .. 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S. .. 6. DATE OF UPLOADING THE ORDER ON WE BSITE.. 7. IF NOT UPLOADED, FURNISH THE REASON FOR DOING SO .. 8. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .. 9. DATE ON WHICH ORDER GOES FOR XEROX & ENDORSEMENT.. 10. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 11. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER . 12. THE DATE ON WHICH THE FILE GOES TO DISPATCH SEC TION FOR DISPATCH OF THE TRIBUNAL ORDER . 13. DATE OF DESPATCH OF ORDER. ..